EX-99.1 2 d771864dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Cascade Microtech Reports Second Quarter 2014 Results

Revenue of $33.5 million

Record Gross Margin of 50.8%

Income from Operations of $2.9 million

GAAP EPS of $0.11

Non-GAAP EPS of $0.13

BEAVERTON, Ore.—(MARKETWIRE) — August 6, 2014 —Cascade Microtech, Inc. (NASDAQ:CSCD) today reported financial results for the second quarter ended June 30, 2014.

Financial summary

Results for the quarter ended June 30, 2014 were as follows:

 

    Total revenue of $33.5 million, compared to $33.8 million for Q1 2014 and $30.3 million for Q2 2013.

 

  Systems revenue of $21.8 million, an increase of $0.3 million, or 1.2%, over Q1 2014, and an increase of $2.0 million, or 10.0%, over Q2 2013.

 

  Probes revenue of $11.6 million, a decrease of $0.6 million, or -5.1%, from record high Q1 2014, and an increase of $1.2 million, or 11.2%, over Q2 2013.

 

    Gross margin of 50.8%, up from 48.1% in Q1 2014 and 47.1% in Q2 2013.

 

  Q2 2014 represents record gross margin performance overall and for each segment.

 

  Systems gross margin of 46.5%, up from 42.7% in Q1 2014 and 44.1% in Q2 2013.

 

  Probes gross margin of 58.9%, up from 57.8% in Q1 2014 and 52.7% in Q2 2013.

 

    Income from operations of $2.9 million, an increase of $0.3 million, or 12.5%, over Q1 2014, and an increase of $0.4 million, or 16.3%, over Q2 2013.

 

    GAAP net income of $1.8 million, or $0.11 per diluted share, compared to $1.6 million, or $0.10 per diluted share, for Q1 2014, and $2.2 million, or $0.15 per diluted share, for Q2 2013.

 

  Q2 2014 includes tax expense of $1.1 million, or $0.06 per diluted share, compared to $0.9 million, or $0.06 per diluted share, for Q1 2014, and $0.2 million, or $0.02 per diluted share, for Q2 2013.

 

    Non-GAAP net income of $0.13 per diluted share, compared to $0.13 per diluted share for Q1 2014, and $0.17 per diluted share for Q2 2013.

 

    Depreciation, amortization and stock-based compensation expenses totaled $2.4 million, compared to $2.1 million for Q1 2014 and $1.7 million for Q2 2013.

 

    Adjusted EBITDAS of $5.1 million, compared to $4.7 million for Q1 2014 and $4.3 million for Q2 2013.

 

    Total cash, restricted cash and investments of $30.3 million, an increase of $1.8 million over March 31, 2014.

 

  Q2 2014 includes stock repurchases of $0.2 million.

 

    Book-to-bill ratio of 0.89 to 1.

“We are very pleased with the continued improvement in both business segments as well as our financial results. In addition to setting record gross margins and validating the key first step to our Success Model, we strengthened our business through the introduction of our strategic partnership initiatives that we call MeasureOne. These initiatives expand our markets while leveraging our sales and service channel. Our leadership position with our customer base continues to be our major focus. This focus will manifest itself in increased investment in research and development to meet our customers request and road-maps. Based upon the engagement with our customers and a strong Q2 behind us, we are optimistic about the rest of 2014,” said Michael Burger, President and CEO.

Financial outlook

For the third quarter of 2014 we are projecting revenue in the range of $31.0 million to $34.0 million with diluted GAAP earnings per share in the range of $0.04 to $0.08, and non-GAAP earnings per share in the range of $0.07 to $0.11. Our guidance assumes a tax rate of 37%, consistent foreign currency rates and no significant one-time charges.

 

1


We will host a conference call beginning at 2:00 p.m. PDT (5:00 p.m. EDT) on Wednesday, August 6, 2014, to discuss our results for the quarter ended June 30, 2014.

A simultaneous audio cast of the conference call may be accessed online from the investor relations page of www.cascademicrotech.com/investors. If you are interested in participating in the call, the live dial-in number is 866-953-6860, or international 617-399-3484, participant Passcode: 85034028. A replay will be available after 9:00 p.m. EDT at the same internet address. (For a telephone replay available after 9:00 p.m. EDT, dial: 888-286-8010, international: 617-801-6888, Passcode: 99609077).

Forward-Looking Statements

The statements in this release regarding performance to the Success Model, customer demand, investment in research and development, our optimism about the rest of 2014, and statements under “Financial Outlook” regarding projected revenue, GAAP earnings per share, and non-GAAP earnings per share, and other statements identified by terminology such as “will,” “should,” “expects,” “estimates,” “predicts,” and “continue” or other derivations of these or other comparable terms are “forward-looking” statements within the meaning of the Securities Litigation Reform act of 1995. Such statements are based on current expectations, estimates and projections about the Company’s business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including: changes in demand for the Company’s products; changes in product mix; potential delays and other factors affecting the timing of new product introductions; the timing of shipments and customer orders; constraints on supplies of components; excess or shortage of production capacity; potential failure of expected market opportunities to materialize; changes in foreign exchange rates; our ability or delay in integrating acquired businesses; and other risks discussed from time to time in the Company’s Securities and Exchange Commission filings and reports, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In addition, such statements could be affected by general industry and market conditions and growth rates and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

Non-GAAP Financial Measures

In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (GAAP), the Company’s earnings release contains Non-GAAP financial measures which are defined below and reconciled to GAAP financial measures in a table later in this release:

 

    Non-GAAP net income is defined as GAAP net income before certain items (adjustments) such as restructuring, facility move and project costs, acquisition-related expenses, the amortization of intangibles and discrete tax items that we believe are either not representative of our ongoing operating performance or effect the comparability of results over time. Non-GAAP net income should not be construed as a substitute for net income as defined by GAAP. However, we regard non-GAAP net income as a complement to GAAP net income in assessing our financial performance over time and in the future.

 

    Adjusted EBITDAS is defined as income from continuing operations before depreciation and amortization and stock-based compensation and certain other items (adjustments) such as restructuring, facility move and project costs, and acquisition-related expenses that we believe are not representative of our ongoing operating performance. Adjusted EBITDAS should not be construed as a substitute for net income from continuing operations or net cash provided by (used in) operating activities (all as determined in accordance with GAAP) for the purpose of analyzing our operating performance, financial position and cash flows, as adjusted EBITDAS is not defined by GAAP. However, we regard adjusted EBITDAS as a complement to net income from continuing operations and other GAAP financial performance measures, by including an indirect measure of operating cash flow.

About Cascade Microtech, Inc.

Cascade Microtech, Inc. (NASDAQ: CSCD) is a worldwide leader in precision contact, electrical measurement and test of integrated circuits (ICs), optical devices and other small structures. For technology businesses and scientific institutions that need to evaluate small structures, Cascade Microtech delivers access to electrical data

 

2


from wafers, ICs, IC packages, circuit boards and modules, MEMS, 3D TSV, LED devices and more. Cascade Microtech’s leading-edge stations, probes, probe cards, advanced thermal subsystems and integrated systems deliver precision accuracy and superior performance both in the lab and during production manufacturing of high-speed and high-density semiconductor chips. For more information, visit www.cascademicrotech.com.

FOR MORE INFORMATION, CONTACT:

Jeff A. Killian

Cascade Microtech, Inc.

(503) 601-1280

###

 

3


CASCADE MICROTECH, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended              
     June 30,     March 31,     June 30,     Six Months Ended June 30,  
     2014     2014     2013     2014     2013  

Revenue

   $ 33,452      $ 33,810      $ 30,307      $ 67,262      $ 57,778   

Cost of sales

     16,466        17,537        16,032        34,003        31,960   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     16,986        16,273        14,275        33,259        25,818   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

          

Research and development

     3,428        3,241        2,694        6,669        5,150   

Selling, general and administrative

     10,630        10,430        9,064        21,060        17,110   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     14,058        13,671        11,758        27,729        22,260   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     2,928        2,602        2,517        5,530        3,558   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense):

          

Interest income, net

     7        2        2        9        22   

Other, net

     (56     (69     (112     (125     (356
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (49     (67     (110     (116     (334
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     2,879        2,535        2,407        5,414        3,224   

Income tax expense (benefit)

     1,051        943        221        1,994        291   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 1,828      $ 1,592      $ 2,186      $ 3,420      $ 2,933   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

          

Basic

   $ 0.11      $ 0.10      $ 0.15      $ 0.21      $ 0.21   

Diluted

   $ 0.11      $ 0.10      $ 0.15      $ 0.20      $ 0.20   

Shares used in computing net income per share:

          

Basic

     16,255        16,242        14,342        16,249        14,283   

Diluted

     16,751        16,679        14,652        16,725        14,626   

 

4


CASCADE MICROTECH, INC.

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     June 30,
2014
    December 31,
2013
 
Assets     

Current assets:

    

Cash and cash equivalents

   $ 27,764      $ 17,172   

Marketable securities

     1,683        4,278   

Restricted cash

     825        1,082   

Accounts receivable, net

     21,912        26,520   

Inventories

     27,095        24,884   

Deferred income taxes

     2,273        2,268   

Prepaid expenses and other

     3,090        2,147   
  

 

 

   

 

 

 

Total current assets

     84,642        78,351   

Fixed assets, net

     6,796        6,403   

Goodwill

     14,361        14,471   

Purchased intangible assets, net

     15,364        16,937   

Deferred income taxes

     1,273        1,235   

Other assets

     1,039        1,114   
  

 

 

   

 

 

 
   $ 123,475      $ 118,511   
  

 

 

   

 

 

 
Liabilities and Shareholders’ Equity     

Current liabilities:

    

Accounts payable

   $ 7,405      $ 7,229   

Deferred revenue

     2,183        2,555   

Accrued liabilities

     9,757        8,859   
  

 

 

   

 

 

 

Total current liabilities

     19,345        18,643   

Deferred revenue

     538        548   

Other long-term liabilities

     1,877        2,119   
  

 

 

   

 

 

 

Total liabilities

     21,760        21,310   
  

 

 

   

 

 

 

Shareholders’ equity:

    

Common stock

     109,263        108,070   

Accumulated other comprehensive income (loss)

     19        118   

Accumulated deficit

     (7,567     (10,987
  

 

 

   

 

 

 

Total shareholders’ equity

     101,715        97,201   
  

 

 

   

 

 

 
   $ 123,475      $ 118,511   
  

 

 

   

 

 

 

 

5


CASCADE MICROTECH, INC.

AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except per share amounts)

(unaudited)

 

     Three Months Ended              
     June 30,     March 31,     June 30,     Six Months Ended June 30,  

Non-GAAP Net Income

   2014     2014     2013     2014     2013  

GAAP net income

   $ 1,828      $ 1,592      $ 2,186      $ 3,420      $ 2,933   

Adjustments to net income:

          

Restructuring

     249        —          112        249        112   

Acquisition and acquisition related

     (457     —          —          (457     —     

Amortization of intangibles

     780        785        234        1,565        470   

Income tax effect of non-GAAP adjustments

     (209     (291     (30     (500     (50
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 2,191      $ 2,086      $ 2,502      $ 4,277      $ 3,465   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP net income per diluted share

   $ 0.11      $ 0.10      $ 0.15      $ 0.20      $ 0.20   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income per diluted share

   $ 0.13      $ 0.13      $ 0.17      $ 0.26      $ 0.24   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in diluted share calculations

     16,751        16,679        14,652        16,725        14,626   

 

     Three Months Ending September 30, 2014  
     Low Range Guidance     High Range Guidance  

Forward-looking non-GAAP net income

    

GAAP net income

   $ 700      $ 1,400   

Adjustments:

    

Amortization of intangibles

     780        780   

Income tax effect of non-GAAP adjustments

     (289     (289
  

 

 

   

 

 

 

Non-GAAP net income

   $ 1,191      $ 1,891   
  

 

 

   

 

 

 

GAAP net income per diluted share

   $ 0.04      $ 0.08   
  

 

 

   

 

 

 

Non-GAAP net income per diluted share

   $ 0.07      $ 0.11   
  

 

 

   

 

 

 

Shares used in diluted share calculations

     16,800        16,800   

 

     Three Months Ended               
     June 30,     March 31,      June 30,      Six Months Ended June 30,  

EBITDAS and Adjusted EBITDAS

   2014     2014      2013      2014     2013  

GAAP Income from operations

   $ 2,928      $ 2,602       $ 2,517       $ 5,530      $ 3,558   

Adjustments:

            

Depreciation

     799        829         944         1,628        1,906   

Amortization of intangibles

     780        785         234         1,565        470   

Stock-based compensation

     821        449         537         1,270        872   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

EBITDAS

   $ 5,328      $ 4,665       $ 4,232       $ 9,993      $ 6,806   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Adjustments:

            

Restructuring

     249        —           112         249        112   

Acquisition and acquisition related

     (457     —           —           (457     —     
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDAS

   $ 5,120      $ 4,665       $ 4,344       $ 9,785      $ 6,918   
  

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

 

6